Detroit planning to lay off 5 percent of workforce

By ED WHITE, Associated Press

Friday, December 7, 2012

DETROIT (AP) — Detroit is making plans to lay off 400 to 500 city employees in the new year, roughly 5 percent of the workforce, one of many steps to try to straighten poor public finances, officials said Friday.

“I’ve got to make sure that this house that’s on fire doesn’t implode,” Mayor Dave Bing told reporters as he described the city’s precarious position.

Bing outlined a series of moves at the end of a week in which the state treasurer said Detroit’s books would get a fresh look from Lansing, an exam that could lead to an emergency financial manager appointed by Gov. Rick Snyder.

“It’s not a veiled threat,” Bing said. “If we don’t get some of these milestones implemented, he has no choice. ... I don’t agree with it but it’s not my decision.”

Bing said he has enough votes in the city council next Tuesday to approve the hiring of outside firms to look for possible fraud in health insurance and Detroit’s compensation program for injured workers. He’s confident the council also will hire a law firm to advise him on financial reforms agreed to by the city and state last spring.

Detroit is deep in debt and has a budget deficit of more than $200 million. Chief financial officer Jack Martin said 400 to 500 layoffs will be settled in the next few months along with unpaid furlough days for remaining workers. Deputy Mayor Kirk Lewis said police officers who work the streets could be spared layoffs, but there’s no guarantee.

Bing said bankruptcy would be the “wrong approach” for Detroit and the state.

“That doesn’t mean it won’t happen. ... I’m a realist. I know that could in fact happen. But I’m also a fighter, so I haven’t given up,” the mayor said.